Exhibit 4.11
Option Grant Letter Agreement
Re: Grant of Options
– Independent Directors Share Option Plan 2007
Dear: [________]
Tower
Semiconductor Ltd. (the “Company”) is pleased to grant you options
(“Options”) to purchase up to one hundred and fifty thousand (xxx) Ordinary
Shares, nominal value NIS 1.00 each, of the Company (the “Shares”), pursuant to
the Independent Directors Share Option Plan 2007 of the Company (the “Plan”), as
of [ ] (the “Date of Grant”). Capitalized terms not defined in this letter
agreement (this “Option Agreement”) shall have the meaning ascribed to them in
the Plan.
The
grant and issuance of Options pursuant to this Option Agreement is subject to the receipt
of all the approvals required under Section 102 of the Income Tax Ordinance (“Section
102”). The Options will therefore be issued to the Trustee. The Options are granted
as 102 Capital Gains Track Options.
The
exercise price of each Option shall be $[ ] (but no less than the nominal value per
Share). The terms and conditions set forth in this Option Agreement are subject to and
supplemented by the terms and conditions set forth in the Plan, a copy of which is
attached hereto. You are urged to review the Plan and shall be deemed to be fully aware of
all the terms and conditions governing the Options set forth in the Plan. By your
signature below, you agree to be bound by the terms and conditions of the Plan.
Notwithstanding the above, in the event of any contradiction between the terms of this
Option Agreement and the terms of the Plan, the terms of this Option Agreement shall
prevail.
The
Options granted pursuant to this Option Agreement will be issued once you sign and return
to the Company: (I) this Option Agreement, (II) the attached Declaration, and (III) any
other form which is required under Section 102 and which will be provided to you by the
Company.
The
issuance of the Options is subject to the main terms and conditions set out below. Other
terms and conditions of the Options are set out in the Plan.
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The
Options are hereby issued to the Trustee for your benefit, subject to the terms and
conditions hereunder. |
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The
Options will not be listed on any stock exchange and are not transferable (except to your
legal heirs or estate). |
| 2. |
Vesting;
Period of Exercise. |
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2.1 |
Vesting
Schedule. Subject to the terms and conditions of the Plan and this Option Agreement,
the Options granted pursuant to this Option Agreement shall become exercisable (vest)
over a period of three (3) years in accordance with the following vesting schedule: |
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(a)
one third (1/3) of the Options shall vest on the twelve (12) month
anniversary of the Date of Grant (the “First Vesting Date”); and
thereafter |
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(b)
one twenty-fourth (1/24) of the Options shall vest on a monthly basis
until fully vested. |
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In
the event of any fractions, the number of Options that vest shall be rounded down to the
nearest whole number and on the last vesting date the aggregate of all such fractions
shall also vest, provided that the total number of Options that vest pursuant to this
Option Agreement does not exceed the maximum number of Options granted pursuant to this
Option Agreement. |
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2.2 |
The
above Options will vest, and subject to the terms hereof, become exercisable, only if on
the date of vesting you serve as member of the Board of Directors of the Company (the
“Board”). |
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2.3 |
Other
than as set forth in applicable law and subject to the terms hereof, vested Options may
be exercised in whole or in part, at any time within a period of ten (10) years from the
First Vesting Date (the “Exercise Period”). Any Option not exercised within the
Exercise Period shall lapse and become void and unexercisable. |
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2.4 |
The
Company will come to an agreement with you as to how to value the Ordinary Shares of the
Company in the event that they are not publicly traded at the time of an Option exercise. |
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2.5 |
Upon
resignation or removal from the Board or failure to be reelected by the shareholders of
the Company to the Board subsequent to the Date of Grant, the Options will be treated as
follows: |
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(i)
Upon
resignation or removal (other than for Cause) from the Board or failure to
be reelected by the shareholders of the Company to the Board: (a) any
vested Options shall expire and become unexercisable two (2) years from
such date; and (b) any unvested Options shall immediately expire. |
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(ii)
Upon
removal from the Board for Cause, all vested and unvested Options shall
immediately expire. |
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2.6 |
The
procedure for exercise of the Options will be provided to you by the Company upon request
or can be obtained at ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by telephone: ▇▇▇▇-▇-▇▇▇▇▇▇▇ or by email:
▇▇▇@▇▇▇▇▇▇▇.▇▇▇. The Company may change the procedure for exercise of the Options
at its discretion. The Company will notify you of any changes in the procedure. |
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2.7 |
There
shall be no restrictions on the resale of Shares by you, except as imposed by applicable
laws, including applicable securities laws. |
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Any
notice or other communication required or permitted hereunder shall be in writing and
shall be delivered personally, sent by facsimile transmission, electronic mail or
certified, registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, sent by facsimile transmission or electronic mail or,
if mailed, three days after the date of deposit in the Israeli mail, |
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(a) |
If
to you, at your address, fax number or e-mail listed beneath your signature
below; |
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(b) |
If
to the Company: Human Resources Department, Tower Semiconductor, P.O. Box 619,
▇▇▇▇▇▇ Ha’▇▇▇▇, Israel; |
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(c) |
If
with respect to Option exercise procedures: ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ or Tel:
▇▇▇▇-▇-▇▇▇▇▇▇▇ Fax: ▇▇▇▇-▇-▇▇▇▇▇▇▇
Email: ▇▇▇@▇▇▇▇▇▇▇.▇▇▇ |
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The
delay or failure on the part of any party hereto to insist, in any one instance or more,
upon strict performance of any of the terms or conditions of this Option Agreement, or to
exercise any right or privilege herein conferred shall not be construed as a waiver of any
such terms, conditions, rights or privileges but the same shall continue and remain in
full force and effect. |
| 5. |
Governing
Law; Jurisdiction. |
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This
Option Agreement shall be governed by, and interpreted in accordance with, the laws of the
State of Israel. The District Court in Tel Aviv shall have exclusive jurisdiction to
settle any disputes that may arise out of or in connection with this Option Agreement and
that, accordingly, any suit, action or proceeding arising out of or in connection with
this Option Agreement may be brought in such court. |
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The
terms and conditions of this Option Agreement shall be subject to and contingent upon the
approval of the shareholders of the Company and no Option may be exercised until such time
as the approval by the Company’s shareholders shall have been received. |
Name of Grantee: ___________________ Date: ______________
Grantee signature: _____________________
Grantee Israeli Identity Number: _________________
Grantee address, fax number: ____________
Fax: ______________ Email: __________________
Grantee Declaration
1.
I, the undersigned, confirm that the contents of this Option Agreement, dated
[__________] are acceptable and agreed to by me.
2.
Any tax consequences arising from (i) the grant or exercise of any Option, (ii)
the issuance of Shares and payment therefor, (iii) the sale, transfer or
exchange of Shares, or (iv) any other event or act of mine or of the Company
hereunder, and any commissions and other expenses related thereto, shall be
borne solely by me. The Company, any of its subsidiaries and/or the Trustee may
withhold any taxes, expenses and commissions as required. I agree to indemnify
the Company, any of its subsidiaries and/or the Trustee and hold them harmless
from and against any and all liability for any such tax consequences,
commissions, expenses or interest or penalty thereon, including without
limitation, liabilities relating to the necessity to withhold, or to have
withheld, any such tax from any payment made to me.
3.
I acknowledge and agree that in the event the Company issues securities as bonus
shares or performs a share split or a similar dissolution, such bonus shares or
other similar rights on the shares granted to me pursuant to this Option
Agreement, shall be transferred by the Company to the Trustee, and the terms and
provisions of the Ordinance and the Rules (as such terms are defined below)
shall apply to the bonus shares and/or other similar rights, as shall the
Trustee’s undertakings under the Agreement between the Trustee and the
Company, as amended from time to time (the “Trust Agreement”).
4.
Without derogating from the former provisions, I acknowledge that the ultimate
liability for income tax, social insurance or other tax-related withholding in
connection with this grant or its exercise is my responsibility. I specifically
acknowledge that any and all applicable laws and regulations in Israel
pertaining to the granting of options including but not limited to the
provisions set forth in Section 102 of the Income Tax Ordinance [New Version]
– 1961 (the “Ordinance”) and any rules promulgated thereunder
including any amendment thereto, any interpretation published by the Israeli tax
authorities in their official guidelines and any judicial interpretation of the
Israeli courts, shall each apply with respect to my Options and may affect the
terms of my Options. Any exercise of an Option and sale of Shares, which
deviates from the rules set forth in Section 102 of the Ordinance or in
regulations promulgated thereunder may result in adverse tax consequences for
me. I further acknowledge that each of the Company, brokers effecting
transactions relating to my Options and the Trustee is under no obligation to
inform me as to whether a particular transaction I may consider effecting
complies with the provisions of Section 102 of the Ordinance or the rules
promulgated thereunder. I further acknowledge that the Company has not, nor does
it intend to, provide tax advice with respect to the tax ramifications of an
Option grant under the laws of any jurisdiction, including Section 102 of the
Ordinance or any rules promulgated thereunder, and that I am urged to seek my
own personal tax advice.
5.
Appointment of a Trustee. I acknowledge that the Trustee has been
appointed to administer my Options in accordance with Section 102 of the
Ordinance and the Income Tax Rules (Tax Benefits Regarding the Grant of Options
to Employees), 2003 (the “Rules”) and pursuant the Trust Agreement. In
accordance with the terms of this Option Agreement and the Trust Agreement, the
Company and/or the Trustee are responsible, among other things, to: (a) withhold
and pay any applicable taxes owed to the tax authorities in Israel in connection
with my Options, including as a result of an exercise of my Options and sale of
the Shares by me, prior to releasing any funds owed to me, (b) provide the tax
authorities in Israel with an annual report in accordance with the Rules, and
(c) provide the Israeli tax authorities with a report regarding the grant of
Options under the Plan, within ninety (90) days from the Grant Date in
accordance with the Rules. Any fees associated with the exercise of my Options,
including as may be specified in the Trust Agreement, will be borne solely by
me. In accordance with the approval granted by the Israel tax authorities in
connection with the Plan, certain of the functions related to the administration
of my Options may be performed by the Company.
6.
Required Holding Period. In accepting this grant, I acknowledge that
unless otherwise permitted by the Israeli tax authorities, the Rules as of the
Date of Grant, prohibit me from selling my Shares during a period of twenty-four
months from the date the grant took place as my Options are subject to the
“capital gains track” as set forth in Section 102(b)(2) of the
Ordinance (the “Required Holding Period” and “Capital Gains
Track”, respectively). Notwithstanding the above, if I elect to sell my
Shares during the Required Holding Period, I hereby acknowledge that the sale of
the Shares will be taxed in accordance with the relevant provisions of Section
102 of the Ordinance and the Rules regarding a breach of the terms of the
Required Holding Period. For the avoidance of doubt, a sale of the Shares during
the Required Holding Period will forfeit my right to receive the tax benefits of
the Capital Gains Track and the income derived from the exercise of the Options
and the sale of the Shares will be taxed as ordinary income (and not at the
reduced capital gains tax rate, if applicable) and will be generally subject to
National Insurance and Health Tax.
7.
I am aware that: (i) the Company intends to issue additional shares and options
in the future to various entities and individuals, as the Company, in its sole
discretion, shall determine; and (ii) the Company may increase its share capital
by new securities in such amount as it finds expedient; and I hereby waive any
claim I might or may have regarding such issuance or increase other than any
claim or right I may have pursuant to any written agreement between myself and
the Company.
8.
I am aware that pursuant to Section 102(b)(3) of the Ordinance if my Options are
issued with an exercise price lower than the average closing price of the
Company’s shares on the 30 (thirty) trading days preceding the issuance of
the Options, a part of any benefit ultimately derived from the exercise of the
Options and the sale of the Shares, generally up to the amount equivalent to the
difference between these prices, will be taxed as ordinary income and not at the
reduced capital gains tax rate and generally will be subject to National
Insurance and Health Tax.
9.
Transfer of Information. I hereby consent to the transfer of information
that the Company is required to report to the tax authorities and to the Trustee
relating to the Options in accordance with the provisions of Section 102 of the
Ordinance and the Rules.
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| Name of Grantee: _______________ |
Signature: ___________ |
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| ID Number: ____________ |
Date: ____________ |